The Global Rush for Rubber: Is Burma the ‘Final Frontier’?

A rubber plantation in Mon State’s Ye township that a local rights group says has been confiscated by the military. (Photo: HURFOM)

The world is currently witnessing the fastest-growing commercial pressure on land in history. The past decade has seen at least 49 million hectares of land in developing countries leased out by global investors, often under the guise of ‘national development’.

The impacts on the ground, however, have been forced evictions of rural communities, food insecurity, loss of livelihood and increased poverty, as well as irreversible environmental destruction.

In Southeast Asia, large-scale rubber plantations are one of the main drivers of land grabs and deforestation. As Burma emerges as a key market, the government must decide how to avert the social and environmental harm that the rush for rubber has cost its neighbours.

Around 85 percent of rubber globally is, in fact, produced by smallholders, with farmers typically owning plots of land ranging anywhere between 5 and 100 acres. The beauty of rubber is that farmers can plant it with other cash crops such as banana, tea, coffee, cocoa, cassava and pineapple. Not only does this reduce competition for land, it also provides an alternative income for farmers, and the diversity of crops provides a source of food for families.

This type of agroforestry system, sometimes known as ‘jungle rubber’, can provide resilience to what are often volatile global markets whilst also helping protect biodiversity and ecosystems. In fact, the recent rapid increase and current crash in rubber prices indicate how volatile the market can be.

The Mekong region, however, is seeing a more alarming type of investment in rubber production. Facing both growing global demand and a shortage of land, the main rubber producer countries have turned to neighbouring countries to expand their rubber production.

The last few years has seen a new wave of rubber investors acquiring large swathes of land in neighbouring ‘frontier’ countries such as Cambodia and Laos, with devastating consequences for both people and forests. In 2013, Global Witness exposed this new reality of the industry in its report ‘Rubber Barons’. Now the industry has its sight set on Burma, often dubbed the ‘final frontier’ for investors in the rush for the world’s remaining natural resources.

Decades of military dictatorship and rampant corruption has already seen many of Burma’s abundant natural resources exploited for the benefit of a few. A culture of secrecy surrounding land investments has further fuelled concerns that Burma’s natural wealth is being looted by members of the military, political and business elite whilst the poor are left empty-handed.

The last few years has seen huge rubber plantations expand into the country, and with the suspension of sanctions and the country opening up for the first time to global investors, far from bringing progress this agricultural investment model risks both exacerbating poverty levels and increasing deforestation.

It’s not clear why investors are buying up such large tracts of land for rubber when it’s grown so effectively by smallholders and no one in the industry has really been able to provide an answer. It’s true to say, however, that large-scale land investments tend to go hand-in-hand with both weak rule of law and a lack of recognition of local people’s rights to their land.

Access to valuable timber may also be an incentive: land grabbing and forest destruction are frequently two sides of the same coin. Companies grab land to access valuable species such as rosewood, while forests are cleared to make way for agriculture. In both cases local communities and the environment lose out to companies and corrupt politicians.

Land deals don’t need to happen this way—there is masses of evidence to show that investing in and supporting smallholder farmers brings lasting economic, social and environmental benefits. Burma already has an established smallholder rubber industry—what farmers need is government support to boost the productivity and quality of the rubber they produce.

This can be done through the provision of extension services and better access to the right technology. Well-supported cooperatives can also improve the efficiency and productivity of smallholders and, in turn, secure greater commercial and economic benefits for farmers.

In order for farmers to benefit in the long-term from these projects, they need to have secure tenure of the land and resources on which they rely for their livelihoods. The current drafting of the new national land policy provides an opportunity to ensure that the needs and rights of smallholder farmers are protected and to strengthen and align the current laws governing land investments. Civil society engagement in the drafting of the policy will be a crucial part of the process.

The international community is poised to invest in Burma’s rich natural assets. The government currently stands at a crossroads with regards to how it takes advantage of such foreign investor interest. The future of Burma is not yet clear, but the decisions taken now will impact significantly on the country’s people and environment for many years to come.